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Exxon asks for political support from the US to overturn EU climate law
Exxon Mobil has intensified its attacks on a European Union law on corporate sustainability and taken their concerns directly to U.S. president Donald Trump. They warned that the regulation would lead to more companies leaving Europe. Last year, the EU adopted its corporate sustainability due diligence (CSDD) directive. This mandates that companies fix any human rights or environmental issues in their supply chains or risk a base fine of 5% on global turnover. The European Commission, in response to the criticism of businesses and German and French leaders that the law will harm the competitiveness of the EU, proposed a series of changes to the law earlier this year. In an interview, Exxon CEO Darren Woods said that it would not be enough and called for the law to completely be revoked. Woods stated that he had spoken to Trump, and other members of Trump's administration who are involved in trade and EU policy. The administration also expressed concerns over CSDDD during trade negotiations. Washington and Brussels are still at odds over the simmering dispute, which has recently led to the US considering sanctions against EU officials for separate tech legislation. Woods noted that Woods' oil company has closed, sold or exited 19 of its operations because, according to him, red tape was impeding the business. This is yet another piece of legislation which would either accelerate this incentive or cause businesses to reduce their activities in Europe. The European Commission didn't immediately respond to an inquiry for comment. Woods added that an exorbitant fine of 5% on global sales would "break the bones" of Exxon. Last year, the top U.S. oil producers' sales totaled $339 billion. U.S. legislators are also doing their part to help. In March, Senator Bill Hagerty of Tennessee introduced a bill to protect American companies against being forced to comply to CSDDD. Next month, EU legislators and countries will begin negotiations to change the policy. Environmental activists are appalled by the move to weaken corporate accountability. Exxon announced on Thursday that it will also be pausing its investment of 100 millions euros ($118) in European Plastic Recycling due to separate EU draft rules. Woods expressed his hope that U.S. legislators would make progress in addressing CSDDD. However, he has been disappointed with the response from EU regulators so far. He said, "There's some movement but we need resolution sooner than later." Sheila Dang reported from Houston, Kate Abnett contributed additional reporting and Nathan Crooks edited the story.
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Kuwait Oil Minister expects demand to increase after US rate reduction
Kuwait's oil minister Tariq al-Roumi stated on Thursday that he expected higher demand for oil following the U.S. rate cut this week, especially from Asian markets. On Wednesday, the U.S. Federal Reserve lowered interest rates for the first since December. He also said that he expects new sanctions against Russia to have a positive effect on the oil price. Donald Trump announced on Saturday that the U.S. is prepared to impose new energy sanctions against Russia, provided all NATO countries stop purchasing Russian oil. Eight OPEC+ member countries agreed on September 7, to increase output by 137,000 bpd for October. This is a continuation of the policy of the group since April, which has been to increase production after years of cutting to support the oil markets. Al-Roumi stated that despite the agreement to increase output, "prices were more than satisfactory". He added, "We expected the worst, but everything is fine." The oil market is confusing and difficult to predict. The Minister made these remarks at an event marking the start of oil production at Kuwait Oil Company's Mutriba Field, which is targeting a light oil output between 80,000 to 120,000 bpd. At the event, KOC CEO Ahmad Al-Aidan said: "This step will help Kuwait achieve its strategy of reaching a production capacity for oil of 4 million barrels per day by 2035." The current production capacity is less than 3 million bpd. Reporting by Ahmed Hagagy, Writing by Tala RAMAdan and Ahmed Elimam, Editing by Bernadette BAUCH and Jan Harvey
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Dollar firms after Fed lowers rates and copper falls
The copper price fell on Thursday, as traders took profits after the U.S. Federal Reserve cut rates. Meanwhile, the dollar strengthened after Fed Chairman Jerome Powell said that there would be no further aggressive easing. The benchmark three-month price of copper at the London Metal Exchange fell 0.4% to $9,960.50 a tonne as of 0940 GMT after hitting a low for a week on Wednesday, $9,925. Powell, in his press conference, reacted against the idea of larger cuts. Dollar index rose by 0.1%, to 96.98, on the back of Mr. Trump's remarks. However, it is still down 10.6% for this year. The dollar index is still down around 10.6% this year. Dan Smith, managing Director at Commodity Market Analytics said that the rate decision made on Wednesday was a key driver behind copper's drop. He also pointed out a technical charting pattern called a "triple-top". Smith stated that there has been a significant amount of resistance in the copper market around $10,160. Smith said that the price has turned three times at this point in recent months, which indicates the current momentum will be to the downside. The rest of the base-metals complex was mostly in the red. Aluminium fell as much as 0.6%, to $2,665.50 per ton. This is a new low for the week. It was also down 0.2% at 0940 GMT. The cash aluminum contract premium is added to the contract for three months On Thursday, the price of a ton had dropped to $4 from $16 on Tuesday. Lead was unchanged at $2,012 a ton. Nickel and tin also fell. (Reporting and editing by Rashmi, Harikrishnan Nair, Ed Osmond and Harikrishnan Nair; Additional reporting and editing by Amy Lv & Lewis Jackson)
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Central bank of UAE says that the UAE economy will grow by 4.9% in 2025 due to higher oil production.
Central bank of the United Arab Emirates said that the economy will grow by 4.9% in 2025 compared to an earlier forecast. This is due to increased oil production and growth in non-hydrocarbon sectors. In a quarterly report, the bank stated that it expects hydrocarbon production to increase in accordance with OPEC+ quotas by 5.8% by 2025 and 6.5% by next year. The report stated that "this real adjustment in hydrocarbon production is expected to offset the negative impact on government revenue of the decline in crude oil prices, creating a ripple effect for non-hydrocarbon sector." The UAE is a major oil exporter and has intensified plans to diversify their economy. In the first quarter, the non-hydrocarbons sector accounted for 77.1% total GDP. The central bank projects that the non-hydrocarbon GNP will grow by 4.5% and 4.8% respectively in 2025, and 2026. This growth is likely to be boosted indirectly by the higher hydrocarbon growth through increased investment, government expenditure and confidence. The UAE economy grew by 3.9% in the first three months of the year, led by a non-hydrocarbon expansion of 5.3%. This was driven by manufacturing, financial services and construction sectors. Reporting by Rachna uppal; editing by Andrew Cawthorne
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Stocks and the dollar rise after Fed cuts, but now focus is on BoE
The dollar and stocks both rose on Thursday, after the U.S. Federal Reserve cut its interest rates for the first time this year. Meanwhile, French politics kept the markets in France jittery. And the pound remained steady ahead of the Bank of England's rate announcement. The Fed's steady-as-she-goes-message from what had been a politically charged meeting lifted both the pan-European STOXX 600 and Wall Street futures 0.5%, despite an initially mixed reaction from U.S. traders on Wednesday. Asia also rallied over night. Chinese stocks reached a decade-high as local chipmakers rejoiced at reports that U.S. giant Nvidia was banned in China. South Korea, Taiwan, and Japan's Nikkei ended all more than 1% higher. The dollar's rise to nearly 0.2% on the currency market may also have been a relief for firms that export to countries other than the United States after a recent plunge to its lowest level in three-and-a-half years. The Fed's "dot plot", which is closely monitored, had indicated that two additional rate reductions would be made over the remaining two meetings of this year but only one in 2026. Fed Chair Jerome Powell also moderated expectations by saying that the central bank didn't need to act quickly, though analysts admit this could change. Richard Cochinos, RBC Capital Markets, said: "We look beyond the volatility of one or two days to find underlying trends." In this case, we expect a weaker U.S. Dollar," Cochinos said. He pointed to the expectation of U.S. interest rates falling to 3% in 2013. The euro was largely unchanged at $1.1825, and the sterling was at $1.36. It is widely expected that the BoE will keep UK interest rates at 4% in the future. The main focus will be whether the British central banks slows down the pace of its 100 billion pounds a year reduction in government bond holdings in response to the recent volatility on UK bond markets. The BoE poll conducted in August showed that economists expected the Monetary Policy Committee (MPC) to reduce the pace of monetary policy to 67.5 billion pounds (92.2 billion dollars). This is a larger drop than the 72 billion pounds predicted by the BoE poll. In response to a 25 basis point rate reduction announced by its central bank earlier, the Norwegian crown softened just a little. The Norwegian crown was close to its three-year high against the dollar, and was at a two-month high when compared with the euro. New Zealand's Dollar fell after the data showed that the economy of the country shrank much more than expected. FRENCH FOCUS After the release of August's weaker than expected labour market data, the Australian dollar fell 0.4%. The bond markets are still on the rise, with the yield of the benchmark 10-year Treasury note dropping to 4.06%, and the two-year rate, which is rising with traders' expectation of higher Fed Funds rates, at 3.53 %. The benchmark yield for the Euro Zone, Germany's 10-year bond, fell by 0.5 basis points, to 2.67%. However, attention was again focused on France, as its bond yields moved above Italy's. Brent crude oil fell 0.2% to $67.87 a barrel. Gold, a safe haven, rose 0.2% to $3,665 an ounce.
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Russia announces changes to its budget aimed at decreasing oil revenue dependence
The Russian Finance Ministry announced on Thursday a new measure that it claimed was designed to shield the state budget against oil price fluctuations as well as Western sanctions targeted at Russian energy exports. The government is lowering the price cutoff for oil that oil revenues are deposited into the fiscal reserves fund. This will ensure the fund has enough money to replenish it. At a public meeting, Finance Minister Anton Siluanov stated that "to make our finances more robust, we propose a reduction of dependence on different constraints, whether they are price-related or volume related, in the budget’s reliance on revenues from oil and gas". Siluanov's new measure, which he sought to reinstate the budget rule, after it had been abandoned following the beginning of the conflict in Ukraine, is a victory. However, Russian media claimed that he wanted a larger reduction. The budget is more vulnerable to a drop in oil prices if the rule isn't in place. Siluanov stated that the price cutoff would be reduced by $1 per year, bringing it down to $55 a barrel in 2030. Currently, the cut-off price for barrels is $60. The draft budget will be presented to the parliament on 29 September. Currently, the fiscal reserve fund has approximately 4 trillion roubles (48.25 billion dollars) available. The government plans to use 447 billion roubles (5.39 billion dollars) of the fund to cover a part of the deficit expected to exceed 1.7% GDP. Siluanov stated that the new measures will allow the state budget to reduce the share of revenues from energy to around 22% in the first eight month of 2025, down from 25%. ($1 = 82,9000 roubles). (Reporting and editing by Andrew Osborn. Darya Corsunskaya.
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Dollar gains after Fed Chair's remarks as gold falls further from records
Gold fell further from its previous session record, as the dollar rose after the U.S. Federal Reserve took a more measured approach to future easing in response to a widely anticipated 25 basis point interest rate reduction. As of 0801 GMT, spot gold was down by 0.1% to $3,657.21 an ounce. Prices reached a record-high of $3,707,40 on Wednesday before falling 0.8%. U.S. Gold Futures for December Delivery fell 0.7% to $3691.0. The Fed cut rates by 25 basis point on Wednesday, and said it would continue to lower borrowing costs throughout the remainder of this year. Fed Chair Jerome Powell described the action as risk-management in response to a weakening labour market. He said that the Fed was in a situation where it is "meeting by meeting" in regards to interest rate outlook. Peter Fertig, an analyst at Quantitative Commodity Analysis, said that there was a "bit of disappointment" in the gold market, as the market had expected the Fed to reduce the opportunity costs for gold holdings (more than they did). Gold became more expensive for holders of other currencies due to the 0.2% increase in the dollar. On Wednesday, it fell to its lowest level in more than three-and-a half years. In a low-interest rate environment, non-yielding gold bullion is a good investment. It's a safe haven during times of geopolitical or economic uncertainty. According to CME Group’s FedWatch tool, traders are pricing in a 90 percent chance that the Fed will cut rates again by 25 bp at its next meeting in October. ANZ said that it expects gold will outperform the early stages of the easing cycle. The bank said that the demand for safe haven assets in a geopolitical environment of uncertainty is likely to increase investor demand. The SPDR Gold Trust is the largest gold-backed ETF in the world. Its holdings dropped 0.44% on Wednesday to 975.66 tons from 979.95 on Tuesday. The price of spot silver increased by 0.1%, to $41.70 an ounce. Platinum rose 2%, to $1,389.57, and palladium remained unchanged at $1,154.0/oz. (Reporting by Ishaan Arora in Bengaluru; Editing by Jan Harvey)
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Octopus Energy, UK spins off Kraken Technology arm
Octopus Energy announced on Thursday that it will spin off its technology arm Kraken Technologies and name Tim Wan the newly-separated company's Chief Financial Officer. Britain's largest electricity provider is focusing on its core business. Kraken, a company that provides energy software to major energy companies such as EDF, National Grid US, and Tokyo Gas has reached $500 million in annual revenue committed through licensing agreements. Separation will allow Kraken to expand and invest as required, while also reassuring Kraken's customers about potential conflicts of interests from being owned by another company. Kraken is a global success business that has been operating independently for a while. Completing our journey towards full independence is the next strategic and inevitable step, said Kraken CEO Amir Orad in a press release. Wan, the incoming CFO, was finance chief of the U.S. listed software platform Asana between 2017 and 2024. He oversaw the market listing. Octopus Energy has not provided specifics about Kraken's spin-off. Sky News A report from July stated that the technology group's value could reach up to 10 billion pounds ($13.63billion) if it were separated. The spin-off is expected to also boost Australian electricity and Gas retailer Origin Energy Octopus is owned by, who owns approximately 23%. Origin did not respond immediately to a comment request.
Chevron CEO under pressure to stop share slide as Hess deal stalls
5 years ago, Chevron CEO Michael Wirth won Wall Street honor as the No. 2 U.S. oil business quickly attained a market value larger than Exxon Mobil's after he refused to get into a bidding war with Occidental Petroleum over a rival.
He was ahead of the game when the pandemic hit oil and gas need, requiring competitors to make deep cutbacks that Wirth had already taken on at Chevron. Its shares had actually outshined rivals for five years till 2022.
Fast forward to 2024 and Wirth's legacy is in threat. Chevron's falling earnings no longer cover its dividends and buybacks. Project overruns in Kazakhstan and Australia have actually cost the business billions.
The CEO is likewise locked in a must-win arbitration battle with Exxon Mobil that has held up his $53 billion purchase of Hess, a deal that would offer Chevron a stake in a. rewarding Guyana oilfield that Exxon runs.
Exxon's obstacle has delayed the deal by almost two years,. and threatens to kill it completely by asserting a right of very first. refusal over a sale of the Guyana residential or commercial properties.
Chevron shares are up 18% since Wirth took over as CEO in. 2018, compared to Exxon's 31% gain over the same duration.
Wirth's task is not at risk, state Chevron executives and. market sources. The board gave him a retirement-age waiver. more than a year ago as he began a sweeping overhaul of top. supervisors.
However If you have $1 to invest in an oil company now, how. would you validate investing it in Chevron?, stated Mark Kelly, an. analyst with the monetary firm MKP Advisors in London. The. Hess deal delay has left Chevron without any clear (business) development. story to inform.
Jake Spiering, Chevron's head of financier relations, said. the business's share efficiency this year has been hurt by the. arbitration case that has urged arbitrage traders to brief. Chevron.
The Chevron story is coming. This growth, and earnings,. and cash inflection is coming, Spiering stated. Chevron is poised. to deliver the greatest production development rate in the industry. over the next 12 months by broadening existing projects, he said.
The board is pushing for a quicker turnaround of. revenues, according to people familiar with the board's thinking. who requested privacy as board discussions are personal. Profits have decreased for the previous five quarters on a. year-over-year basis as oil costs pulled away from 2022 highs.
BRAND-NEW TEAM
Wirth has ushered in a new group with the resignations or. retirements of his previous financing chief, head of oil products. and gas, personnels chief and midstream and trading bosses. in a quote to shake things up.
There is a great deal of pressure on Mike since of Hess, said. among individuals close to the company's board. It's a make or. break for Mike, the person stated.
Wirth has shown a knack for multi-billion-dollar. acquisitions, picking up Noble Energy and PDC Energy in offers. near the market bottom or that closed quickly.
We desire be high efficiency, and you ought to anticipate the. board to expect that, Spiering stated previously this month in. action to questions about the company's efficiency.
Wirth was not offered to comment and Chevron declined to. make board members offered for comment.
BIGGEST SHADOW
The most significant shadow over the business stays its dispute with. Hess partners' Exxon and CNOOC Ltd over their Guyana. offshore holdings, which consist of the world's largest oil. discovery in practically 20 years. The deal initially was to. close in the first half of this year, however a choice in the. arbitration case may not be issued until the third quarter of. next year.
The delay is crucial to Chevron due to the fact that the deal closing. would give the company a 30% stake in Guyana's rising oil. output, which last year provided Hess a $1.88 billion web. revenue.
The stake would supply Chevron with long-lived oil. production from a nation with less geopolitical dangers than its. Venezuela or Kazakhstan operations, the latter of which accounts. for almost 20% of Chevron's quickly tapped oil reserves.
The Kazakh Tengizchevroil oil task, in which Exxon holds. a 25% stake, is almost three years behind a preliminary mid-2022. start-up and has exceeded its original $37 billion budget by over. $ 10 billion.
If the (operational) problems continue or if the offer. were to eventually fall apart, we could see further. underperformance, stated Biraj Borkhataria, an analyst at RBC. Capital.
VENEZUELA LICENSE?
Guyana, located on South America's Atlantic coast, could. aid improve the quality of the company's portfolio in Latin. America, where it keeps a limited presence in Brazil, Argentina. and smaller countries. The region leaving out Venezuela has. supplied less than 2% of its global output for the past years.
U.S. lawmakers and Venezuelan opposition leaders and. activists have actually called for tighter restrictions on the company's. negotiations in Venezuela.
Tax and royalties paid to the repressive Nicolas Maduro. administration have propped up the federal government, they state. The. July governmental election declared by Maduro has actually been condemned. as deceitful by the U.S. and regional Organization of American. States.
If Chevron's license to operate in Venezuela were terminated. or amended, which analysts say might take place if previous President. Donald Trump returns to office and restores his project versus. Maduro, the business could lose its right to export about 220,000. barrels per day of oil.
Chevron continues to make the case to U.S. authorities that. it has been a force for excellent in Venezuela and has actually received. continued six-month permissions to stay there.
The No. 2 U.S. oil business is anticipated to publish third quarter. earnings on Friday of $4.26 billion, according to quotes. assembled by monetary company LSEG, down 35% from the $6.53 billion. a year earlier on weaker oil prices and refining margins.
Mike Wirth is in a pickle, stated Frederic Boucher, risk. arbitrage analyst at Susquehanna Financial Group, a market maker. for Chevron and Hess stocks.
If you spend two years dealing with a deal, ensuring. investors you are right, just to be proven incorrect, should you. still be trusted with investors' cash?.
(source: Reuters)